Leadership Owns This Scandal

And just where was (is) the leadership at Wells Fargo in this ethical failure? What kind of culture would lead an employee to even consider falsifying emails, establishing unauthorized accounts, issuing unauthorized credit/debit cards, collecting fraudulent fees and impacting customers’ credit scores? How can customers ever trust Wells Fargo again.

Full disclosure: I am a Wells Fargo customer, and have been since 1991 (when my bank was First Interstate.) I am generally pleased with the service I’ve experienced with Wells Fargo. However, I have had to fight their internal sales programs more than once. They are much too aggressive about meeting internally focused goals.

Trust

What gets measured gets done. When bonuses and advancement depend on making “quotas,” employees will do what they must do to make those quotas—or they will quit.

“Wells Fargo’s resulting market dominance has come at a significant price to the general public, because it has been achieved in large part through an ambitious and strictly enforced sales quota system,” said the complaint.

So it should come as no surprise that once again, being focused on internal numbers rather than on the customer experience has led to fraud and unethical behavior. Again I ask, where was Wells Fargo leadership in all of this? They own it. They built the “win at any cost” culture(or let that culture evolve). Wells Fargo leadership has let all its stakeholders down. Leadership really has only one job—build a sustainable and ethical culture. They have failed.

Internal Focus

I have noted elsewhere on this blog that “To Sell Is Unethical.” It follows that to incentivize your employees to sell is just as unethical if not more so. Apparently, Wells Fargo has learned this lesson the hard way.

“Wells Fargo is trying to clean up the mess created by its high-pressure sales culture, which drove employees to open millions of unauthorized accounts in the names of customers. Pledging accountability, the bank is paying restitution to customers who were charged for these sham accounts, reviewing its process controls, and—as it announced Tuesday—eliminating sales goals for its retail bank products.”

The most disturbing part of this, in my mind, is that the senior executives are once again escaping with millions of dollars while other employees were fired and/or otherwise (rightfully) “punished.” Yet one of the persons most responsible for the toxic culture leaves with accolades from the Chief Executive. This is all too familiar. After nearly causing a global collapse, the leadership at financial institutions have gone unpunished for their part in the 2008 global recession.

I hope that the political leaders will now stop their talk about removing regulations and will instead focus on putting into place the necessary regulations to protect our citizens and consumers. It seems clear that all large institutions must be viewed with suspicion.

Lessons Learned

It’s time for us to recognize that things have changed in our economy/market. The traditional sales function is no longer needed. In its place we need everyone in our company focused on creating a brilliant customer experience. Our marketing team must make sure that our company is found—and found first would be good—when potential (or current) customers decide they need a product or service we can provide. We all know how to find a product or service when we need it. The last thing we want is to be pestered by a sales person.

Incentive plans always have unintended consequences—usually not good ones. In his book, Drive, Daniel Pink discusses the studies that show incentives actually hurt performance for knowledge workers. We can build cultures that make it clear that playing the game of business in an ethical and customer oriented way is the only acceptable way to conduct business. We can share in success in a way that doesn’t cause our employees to turn their focus inward.

Final Thoughts

We have to stop selling. We have to be extremely careful when devising bonus/incentive plans to make sure they do not cause employees to be self or internally focused. Keep the focus on customer experience; not your own numbers.

As for me, as painful as it is, I now have to seriously consider moving the many accounts we have (business, personal, not-for-profit) to a more trustworthy bank with a focus on customers and less on internal Key Performance Indicators. What a mess.